RIPR is a (paper) newsletter and a weekly column appearing in ten
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About

The Rhode Island Policy Reporter is an independent news source that
specializes in the technical issues of public policy that matter so
much to all our lives, but that also tend not to be reported very
well or even at all. The publication is owned and operated by Tom
Sgouros, who has written all the text you'll find on this site,
except for the articles with actual bylines.

Responsibility:

Tom Sgouros

Fri, 25 Jul 2008

A column about Mayoral academies a few weeks back sparked more than
average response. Reviewing some of the letters I received, it seemed
worthwhile to write a bit about what we know about school "reform."

The deafening clamor of energetic academic controversies attracts
funding, and researchers fly to that honey. So one upside of the
arguments over public education is there are swarms of economists and
psychologists and other education researchers out there examining
educational policies and social influences to try to figure out what
works and what doesn't. They publish articles for curious people to
read and evaluate. So I did. (And you can, too. Find the citations
below.)
Here's a little of what I learned while browsing academic literature
about charter schools and school choice.

One of the perennial problems of studying public education is
comparisons with private schools. Private and parochial schools
generally get better academic achievement for less money. But how? Do
they have a magic formula, or is it just that the students at such
schools tend to be better off? The problem has long been that when
researchers try to factor out the effects of race and economic class,
there isn't enough data left over to make valid comparisons between
private and public schools.

But this is no longer true, somewhat ironically due to the No Child Left
Behind act. New testing mandates have increased the number of private
and parochial (and charter) schools who administer the National
Assessment of Educational Performance (NAEP) tests to their students.
So now we can make statistically valid comparisons. And what we find is
that private and parochial schools are generally no better than the
students who attend them.

In a study of NAEP math tests from fourth and eighth grades, Christopher
and Sarah Lubienski, researchers at the University of Illinois, showed
that public schools perform as well as private, parochial and charter
schools once you adjust the populations so you're comparing apples to
apples. Where there are significant differences, the public schools
came out ahead.

Be careful not to misunderstand. Though it does imply that public
schools are better than you think, given the students they have, the
study does not say that all public schools are better than private
schools. Lots of public schools aren't very good. That is not
controversial. But the Lubienskis' findings tell us that merely
replacing them may not be a solution.

Another idea popular with school reformers is to allow students to
choose the school they'll attend. A provision of NCLB says students in
"failing" schools must be offered an opportunity to go somewhere else.
Sounds like a sensible idea, right? The problem is that very few
students actually take those opportunities. Nationally, around 97% of
students who have a choice to leave a failing school don't take it
according to Courtney Bell, a researcher at UConn.

This seems irrational, but Bell set out to take a closer look. She
conducted a large number of interviews with parents of children in
failing schools in a medium-size midwestern city. What she found was
that people were usually making perfectly rational choices among the
options they saw available to them. But she found those options were
frequently not what education reformers imagined them to be. She found
parents were not choosing from all schools, but among the schools they
could get their children to safely, schools that used the same
curriculum their children had already begun, schools where they thought
their children would have friends, and so on. Among those schools,
Bell found parents usually picked the best, but this was very often the
original, failing, school.

An even more provocative study of school choice programs was done by
Stephen Levitt, a professor of economics at the University of Chicago
and the author of "Freakonomics", a best-seller a couple of years ago.
In Chicago, students can attend a selection of high-performing schools,
but they are chosen by lottery. He looked at the academic performance
of students who attended the schools and found they were, in fact,
better than students who did not attend. But he also noticed something
surprising: the best indicator of academic performance was whether a
student had entered the lottery at all, not which school he or she wound
up attending. That is, students who entered the lottery and didn't make
it did just as well as their luckier peers who got in. The population
who winds up at the good schools are the good students, because
they're the ones who enter the lotteries.

The problem with education is it's so easy to be swept away by new
carpets and shiny new programs and what sound like sensible reforms.
But we live in a complex world, and what sounds good isn't always good.
There is real data out there, and we can learn from it -- if we choose
to.

At this point, the legislative wheels are greased and the train is
moving; Cumberland is going to embark on this project. It's possible
the designers of the Mayoral Academies will avoid the pitfalls I've just
described. If so, good for them. But we'll be watching -- as will all
the children who won't get to attend these wonderful new schools.

A good AP
article points out that had the food industry not successfully
lobbied the Bush administration to relieve them of "burdensome"
paperwork requirements, they might not have lost $250 million over the
tomatoes/jalapenos/salmonella crisis.

Wed, 23 Jul 2008

A subscriber wrote in to point out that I'd forgotten an important
point in my article inspired by this
deeply uninformed blog post (caution: fancy graphics, crashes my
browser sometimes).

My only quibble is about responding to the assumption there was little
population growth in RI. 1950 population of RI was about 792,000 but
in 2000 it was about 1,067,000 an increase of 275,000 people, almost
35%, not an inconsiderable number (but pop. growth often ignored by
both right and left).

Well, add that to the other points in the article. (It's in
issue 32, just out.)

Courtney Bell's paper on school
choice. Describes how different parents choose rationally among
the choices they perceive, but points out that the choices they
perceive aren't necessarily the choices education reformers think they
have.

The data about school choice in Chicago were presented in the book
Freakonomics by Steven Levitt and Stephen Dubner. The relevant
chapters aren't available on line, though google is your friend here.
But the book is a best-seller, so it won't be hard to come by a
copy.

Thu, 17 Jul 2008

Last week the state Public Utilities Commission (PUC) approved a
record increase in electric and gas utility rates. The commission
chair was apologetic, but said the law was clear that National Grid is
owed this rate increase because the rates they pay for electricity and
gas have gone up.

So it's time to back up a little and ask about that law, isn't it?

John Adams wrote that ours should be a government of laws, not men,
but men (mostly) wrote those laws. In this case, the law was written
and pushed through the legislature largely through the efforts of
George Caruolo, Democratic Representative from East Providence and
House Majority leader during much of the 1990s. Through his work,
Rhode Island became one of the leaders in the national movement to
deregulate the market for electricity.

Actually, "deregulation" is a little awkward a term for what happened,
since it's not like the PUC went out of the electricity-regulating
business. We only separated the carriers from the suppliers. For
example, Narragansett Electric used to generate electricity and might
have delivered it to your house, but now National Grid has the wires,
and Virginia's Dominion Energy owns the Manchester Street generating
station you see from the highway in Providence. These days, you're
buying your electricity from the suppliers and the carriers are just
bringing it to you. Through the medium of the carriers, you can
select any electric company you want, allowing competition among
electric companies, which will drive down rates, right?

Unfortunately, it hasn't really worked that way. Most people have not
taken the opportunity to shop around for electricity, for one thing.
For another, regulating the carrier is pretty meaningless when the
supplier is the one boosting the rates. It becomes regulation only of
the unimportant part of the cost of your electric bill. This is what
happened at the PUC last week.

In the 1990's, energetically abetted by the Clinton administration, a
wave of electricty deregulation laws were adopted in states around the
country. Shortly after that, electric generating companies found that
they had some power in this brave new free market, and used it. They
found convenient reasons to turn off some of their generators, sell
their power to other states and engage in some much more arcane market
manipulations too. This brought rolling blackouts and the electric
crisis in California and the west. Enron -- a company whose business
was speculating in energy supplies -- was deeply implicated in the
crisis, as was Reliant Energy of Houston, who wound up paying
half a
billion dollars in 2005 to settle fraud claims over the episode.

Free market apologists say that the California crisis was because the
legislature put retail price caps on electric rates while wholesale
prices were deregulated. Without those caps, there would have been no
rolling blackouts. And they're probably right. Legislators there
made the mistake of believing that prices would go down under
deregulation, so they didn't worry about the awkward effects of those
price caps. But without them, the market manipulations would have
sent electric rates into the stratosphere. California rate payers
took it on the chin, but thanks to the rate caps, Pacific Gas and
Electric shared the pain.

Back in Rhode Island, we didn't get the rolling blackouts, but the
market hasn't exactly been sitting still here. It was said that
deregulation would unleash the power of the free market on
electricity, making power less expensive. So now it's ten years into
this grand experiment in the free market. What happened?

In 2000, when you and I were first able to choose our electric
provider, electricity was 3.8 cents per kilowatt-hour. Now it's 12.4
cents, up more than a third from 9.2 cents last week. Aggregate
statistics from the US Energy Information Administration show that
electric rates dropped about 15% lower when deregulation took effect
in 1997. But you and I didn't see that savings. Some big industrial
and institutional users, who could buy lots of electricity in bulk
enjoyed that drop, and they pull down the average.

So it seems that ten years ago, we traded away our ability to regulate
electricity prices in exchange for lower prices for big users. How's
that working out for you now?

One more thing: Deregulation wasn't a free reform. According to the
deal Caruolo negotiated with Narragansett Electric, we *paid* them to
sell off their generators. They said they wouldn't be able to recover
the cost of construction and other expenses when they sold the
generators, so it was only fair that we pay them that difference.
Rhode Island ratepayers wound up on the hook for about $1 billion in
"stranded costs" to the utility. As it turned out, after
deregulation, Narragansett Electric sold the generators for much more
than they'd anticipated, but their shareholders reaped that windfall
not you and me.

The best part? This is itemized on your electric bill every month
under "Transition Charge." So you can see how much you pay each month
for the benefits of the free market in electricity. Makes you feel
warm all over doesn't it? Or is that because you turned off the AC?

So we're going to bail out Fannie and Freddie, the mortgage giants.
But why? Maybe we need them, but do we need them to be private,
for-profit entitities? Why, exactly? From here:

The government uses conditions all the time when it offers
help to low and moderate income people. Unemployment insurance, TANF,
food stamps, and even student loans come with all sorts of conditions.

It is only when it comes to giving money to extremely rich people that
we find it impossible to impose conditions. Again, we could have told
Fannie and Freddie that no executives will get more than $2 million a
year in total compensation. We could have told their shareholders that
they are out of luck, because that is what is supposed to happen when
you invest in a bankrupt company.

Instead, we told the people who work as truck drivers, school
teachers, and fire fighters that they will have to pay more in taxes
to help some of the richest people in the country escape the
consequences of their own stupidity. While kicking the poor is always
fun for politicians, neither the Bush administration nor Congress are
prepared to tell the very rich that they are on their own.

In 1991, RI suffered a banking disaster of our own. We had an
opportunity then to turn that sow's ear into a silk purse, but passed
on it because it would have meant government getting into the banking
business, and that's anathema to people who are hide-bound by
ideology. So because of ideology, we overlooked a practical solution
that would have gotten everyone their money back without spending a
dime of taxpayer money. Ideology is expensive.

Sat, 12 Jul 2008

Fri, 11 Jul 2008

Last week, I was a little startled to get a phone call from my
daughter, who is 14. She plays the viola, you see, and is traveling
with her high-school orchestra in Europe for ten days this summer, and
I'm the kind of 20th-century guy who is surprised by phone calls from
Germany.

But it was a happy call, and she reported to me that they were in
Berlin, and told me about the Checkpoint Charlie museum (giving me the
opportunity to reflect that the Berlin wall, which seemed eternal to
me once, came down three years before she was born), and the
Fernsehturm, a giant TV tower with a rotating platform from which to
view the city. But she also reported that the trains and buses were
cool, too. She was thrilled that she and her friends could get
wherever they wanted to go -- by themselves. We had a 3-minute call,
and probably half of it was about the feeling of independence and how
much fun the trains were to use.

Now I'm relieved she's well and enjoying herself, even if I'm not
perfectly sure I'm ready for her to be all that independent quite yet,
thank you very much. But there you have her take on sensible public
transit: fun and liberating.

Meanwhile, back home, the Governor vetoed a bill that would allow
RIPTA buses to carry a radio beacon to delay the change of some
traffic lights as they approach. (Many police and fire vehicles carry
these beacons now.) According to his veto message it's an "increased
danger to all motorists" to wait a bit longer at a traffic light, so
hooray for the Governor for saving us from the scourge of better
public transit.

But this is a shame. Public transit is a way to avoid worrying about
parking, avoid wear and tear on one's car, and read or sleep on the
way to and from work: less worry, more sleep. Plus, the bus driver on
one of the routes I ride gives out cookies at Christmastime. How can
you go wrong?

Longtime bus riders like me have viewed the last couple of years with
a mixture of gratification and frustration. Gratification because so
many former scoffers have seen the light and joined me on the bus.
These people have realized they could save a ton of money and time by
taking the bus. Of course the frustration is also because so many
former scoffers have joined me on the bus. The buses I ride are
frequently standing-room only, and on some routes the bus routinely
passes waiting patrons for lack of room.

You can see the picture in the statistics. With the surge to $3 gas,
RIPTA ridership rose 11.6% in 2006 -- a huge jump -- but only 5.8% in
2007. Now that gas is up past $4 and still climbing, the system's
capacity not only hasn't grown to meet the new demand, but it's shrunk
and is about to shrink more due to budget cuts.

The problem is that the system is stuck: endlessly starved of
resources by a legislature and Governor who don't ever ride the bus
themselves and don't see its value. The result: overcrowded and
unpleasant riding conditions, schedules so sparse they barely work at
all, and unreliable service to boot. The truth is that RIPTA is
barely adequate as public transit, and the proof is in the number of
cars parked at RIPTA's Elmwood Avenue garage each day -- even the
drivers and managers who get a free ride don't take it.

You would think that $4 gas would be incentive enough for drivers to
avoid driving, and I've heard stories about families curtailing summer
driving trips this year. But are the streets perceptibly emptier?
Not really, and the reason is that incentives are meaningless without
alternatives.

Are you feeling pressed by high gas prices? Do you wish you had
another way to get to work or shopping, to the movies or an evening
out? In other places in the world, they have alternatives to cars.
(And fewer drunk drivers, too.) Why not here, too? Despite the
sprawl of the last 50 years, Rhode Island is still pretty compact.
With energy and creativity, we could build a system that was actually
an appealing and convenient way to get around the state, but we'd need
many more buses on existing routes, and probably some new routes too.

Unfortunately, none of that seems to be in the cards. Is it possible
to imagine a more inoffensive and minor way to improve RIPTA's service
than to give the bus a slight advantage at traffic lights? Under this
administration, even that is beyond the pale.

Robert Batting, the Governor's new appointment to the RIPTA board
chair seems determined only to manage the agency's decline in a
fiscally responsible way, and pushed through a rate increase as his
first significant act. I suppose that's better than being stupid
about it, but where is the vision for improving the system to one
people could actually use to get around the state? Oh, right. We
can't afford it, because according to our current leaders, the most
important thing your government can do is less of everything.

My call from Berlin reminds me that a better system is possible. It's
not free, but neither is gasoline, in case you hadn't noticed. Your
government could help here, but won't.

Fri, 04 Jul 2008

In 1981, Ronald Reagan proposed cutting Medicaid by making it
a "block grant" program instead of an "entitlement." Instead of
giving each state however much they need to pay for care to the poor
and disabled, the federal government would limit the amount spent on
Medicaid each year by giving a set amount to each state and letting
the state decide how to split it up. Understanding that the nice
words about states' rights and independence were only a cover for
cutting the program, this was roundly rejected by the Democratic
Congress. Newt Gingrich proposed the same thing in the newly
Republican Congress of 1995, and it was roundly rejected by the
Democratic President. In 2003, George W. Bush proposed it yet again,
but couldn't get it through even that Republican Congress.

But in 2008, Governor Donald Carcieri, House Speaker William Murphy
and House Finance Chair Steven Costantino cooperated to give Bush
exactly what he'd asked for, at least for Rhode Island. And if it
goes through, we'll be the precedent for everyone else.

Under the current funding mechanism, Medicaid is not a single program,
but several. The state receives money that it uses for care to the
poor, for long-term care for the disabled and elderly, for
uncompensated care to hospitals and a few smaller categories. The
"waiver" being sought by the Carcieri administration would combine
these all into one big "block grant" within which the state could
move money back and forth.

It's not free money though. For every Medicaid dollar spent in Rhode
Island, state pays about 48 cents and the federal government about
52 cents. If the state could find a way to get fewer Medicaid
dollars from the feds, then it will cost us less money out of the
state budget. Pretty smart, no?

Congress may have said no to block grants, but the Bush administration
says it can administer the program this way to states who ask for it.
The Governor's original budget proposal contained a request to do
exactly that. This "waiver" request would also allow flexibility in
program eligibility rules, as well as co-pay amounts and other
changes.

The Governor's original budget also contained a proposal to save
$67 million in Medicaid for long-term care by emphasizing home care
over nursing facilities. This is an excellent idea, not least because
home care can be much less expensive than a nursing home. But we're
not going to save this much money in a single year unless you're
talking about putting 25-year residents of some of these facilities
into their wheelchairs and rolling them down to the curb. Many of
these patients no longer have homes to return to. There aren't enough
home-care service providers yet, either.

The Governor's budget also would have cut 7,400 adults from RIte Care,
and raised the amounts poor people pay. The Assembly didn't cut
nearly as many people, but it did acquiesce to changes that will make
the program more expensive to use, so lots will drop the coverage
anyway.

So of the two biggest pieces of Medicaid, you have one where the
administration is on record that they intend to cut more in a single
year than is really possible, and another part where they were
prevented from cutting as much as they'd intended. And a waiver
request that would allow funds to be shifted from one program to
another. Hmmm. Think think think. I wonder what will happen to care
for the poor if the waiver is granted?

Here's where the story gets complicated.

During budget deliberations in House Finance, the budget article
proposing the waiver was eviscerated and replaced with a promise to
convene public hearings to take up the issue. But when the budget
debate on the floor of the House came around to that article, Finance
Chair Costantino stood with a 26-page amendment that essentially
restored the Governor's original language, really adding only that
House Finance reserves the right to veto the waiver arrangement.
Here's the best part: having demanded that everyone vote on this
surprise 26-page amendment with only a minute or two to read it, most
House members did exactly as they were told. Only three (David Segal
and Steve Smith of Providence and Art Handy of Cranston) voted no.

So there you have it: in this bluest of blue states, our Democratic
House leadership has achieved what Ronald Reagan, Newt Gingrich and
George W. Bush could not. To be fair, they did retain a veto over
the waiver application, and at the hearings on Article 17, Costantino
seemed critical of the waiver proposal. He asked for---and did not
get---assurances that if the department was unable to achieve savings
in long-term care that they wouldn't take it out of care for the poor.

On the other hand, he and the Finance Committee had months to come up
with something different and did not. Furthermore, the Assembly
leadership are on record as approving $67 million in cuts to Medicaid.
Their latitude to reject any waiver proposal is very limited, whatever
their intentions, because they have to make the bottom line add up.

The process is going forward now, with the administration working on
the waiver application, and the federal government poised to consider
it. Do you like the sound of this?